1. Solis has earnings per share of $3.50. It has 10 million shares outstanding and is trading at $20 per share. Solis is thinking of buying Universal, which has earnings per share of $1.40, 4 million shares outstanding, and a price per share of $18. Solis will pay for Universal by issuing new shares. There are no expected synergies from the transaction. If Solis offers an exchange ratio such that, at current pre-announcement share prices for both firms, the offer represents a 20% premium to buy Universal, then what should be Solis' earnings per share after the merger?

		$2.42
		$2.56
		$2.70
		$2.84
		$2.98

2. Solis has earnings per share of $2.90. It has 10 million shares outstanding and is trading at $20 per share. Solis is thinking of buying Universal, which has earnings per share of $1.40, 4 million shares outstanding, and a price per share of $18. Solis will pay for Universal by issuing new shares. There are no expected synergies from the transaction. If Solis pays no premium to buy Universal, then what should be Solis' price-earnings ratio after the merger?

		7.31
		7.86
		8.41
		8.96
		9.51